Being made redundant happens when your employer needs to reduce the workforce. There are many reasons for making job cuts, these include: as a result of reducing costs, the job you were hired for no longer exists, new technology or a new system has made your job unnecessary, or the business is closing down or relocating. Losing your job can be upsetting, but there are ways to minimise the impact. Here’s what to do to prepare yourself if you think your time could be up shortly.
Step 1
Identify your rights
As an employee, you have certain rights when it comes to being made redundant. These include:
• The selection process should be fair and objective
• You should receive an explanation in writing
• You should be told and consulted about the redundancy in advance, so that you can discuss alternatives
• You should be given a notice period before your employment ends
• Employers should try to find you alternative work in the organisation if they can
• You should be able to try out any alternative offer of suitable work for a trial period of four weeks
• All untaken holidays should be paid
• You should be able to take reasonable time off during the notice period, with pay, to look for alternative work or training.
Step 2
Understand your payment options
If you’ve been made redundant and have worked for your employer for at least two years, you are entitled to redundancy pay. You should receive a written statement explaining the amount you’re due and how it was calculated. The total sum you receive depends on your age, length of service (calculated on a maximum of 20 years) and your earnings (which are capped at £350 a week). This £350 limit will change to £380 on 1 October 2009. The first £30,000 of redundancy pay is tax free, and your employer normally pays it but if the company has gone bust, the Redundancy Payments Office will pay. If you’re getting the legal minimum amount, you’ll receive half a week’s pay for every year of service while you were under 22, one week’s pay for every year of service between the age of 22 and 40, and one and a half week’s pay for every year of service over 41 years of age. Many firms have their own policies that are more generous than the legal minimum, so check your contract for more details.
If you’re facing redundancy and have been with the employer for less than two years, unfortunately you’re not entitled to redundancy pay, but you should get notice pay, which must be at least one week’s pay for each year you have worked.
After being made redundant, check if you’re entitled to state benefits, such as Jobseeker’s Allowance or Income Support, by signing on to your local Jobcentre.
Step 3
Plan your next move
Redundancy can put huge pressure on you and your family, but don’t be too disheartened if it happens to you, because it can bring new and exciting opportunities. You may want to consider a complete change of career, or you may think about retraining or even working from home. Retraining enables you to build on your experience and pick up new skills. You could even begin a higher education course and learn something new. Check out what courses are available at your local colleges, and there are many grants or bursaries available to help you. Starting up a business could be an option if you have a decent payoff to start you off. Go to www.businesslink.gov.uk for information about getting a business off the ground. You could also buy into a franchise. It’s considered to be a safe way of growing a successful business because you enter the market with an established brand and a well-liked format. Franchising significantly reduces the financial commitment and risks of building a company from scratch.
But if you wish to remain in a similar role, it’s worth updating your CV and refreshing your interview techniques. It’s also a good idea to register with recruitment consultancies and online job sites to receive information on the latest vacancies. Your employer might also give you support and advice during your notice period, including access to a careers adviser, which you should take advantage of.
Where to go for help
For more information on redundancy, visit the UK government website, www.direct.gov.uk or if you belong to a trade union, you could ask them for advice too.
You can find out if you’re entitled to receive any benefits or assistance by visiting your local Citizens Advice Bureau www.citizensadvice.org.uk
And for free advice on all employment issues, contact the Advisory, Conciliation and Arbitration Service (Acas) on 08457 474747 (8am to 6pm Mon to Fri) or visit www.acas.org.uk
